STOCKS | Jeffrey Gundlach Warns Higher U.S. Bond Yields Could Trigger a Recession

Jeffrey Gundlach warned investors to watch rising interest rates. According to Sina Finance, the DoubleLine Capital chief investment officer said at an event in Manhattan last Thursday that U.S. Treasury yields, already near a two-decade high, could rise sharply further and spark market turmoil. He said that if rates truly begin to climb sharply, that would likely be enough to push the U.S. economy into recession and could trigger a wave of corporate failures. Gundlach also said long-term bond yields could break above 6%, prompting the U.S. Treasury to take larger intervention measures to calm market volatility; the Treasury recently announced a $6 billion long-bond buyback plan. Gundlach said higher borrowing costs could feed through to vulnerabilities in AI-related trades and private credit. He added that 10-year U.S. Treasury yields recently moved above 5%, a psychological threshold for the bond market, and said the Treasury buyback plan did not ease investor sentiment.